Problem: Module 2 Textbook Problem 12 Learning Objective: 2-8 Identify and determine the cost of long-term...

 

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Problem: Module 2 Textbook Problem 12 Learning Objective: 2-8 Identify and determine the cost of long-term operational assets Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $117,760. The seller agreed to allow a 5.75 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,660. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $760. The loader operator is paid an annual salary of $11,380. The cost of the company's theft insurance policy increased by $1,620 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $12,600. Required Determine the amount to be capitalized in the asset account for the purchase of the front-end loader. (Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.) Costs that are to be capitalized: List price Total costs Problem: Module 2 Textbook Problem 12 Learning Objective: 2-8 Identify and determine the cost of long-term operational assets Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $117,760. The seller agreed to allow a 5.75 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,660. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $760. The loader operator is paid an annual salary of $11,380. The cost of the company's theft insurance policy increased by $1,620 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $12,600. Required Determine the amount to be capitalized in the asset account for the purchase of the front-end loader. (Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.) Costs that are to be capitalized: List price Total costs

Answer rating: 100% (QA)

A 1 Costs that are to be capitalized ... View the full answer